EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516645
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Bluescope Steel Ltd applied for a TCO in respect of certain Walking Beam Furnace Parts on 25 November 2005.
Instrument
TCO No 0516645 was made on 13 February 2006. It declares that those certain Walking Beam Furnace Parts are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is 0%.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0516645 is taken to have come into force on 25 November 2005.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 0516645, enacted under the Customs Act 1901, aims to address the need for tariff concessions on specific goods where no substitutable products are produced domestically. This instrument was introduced to facilitate the application process for Tariff Concession Orders (TCOs), allowing for lower rates of customs duty on certain goods. The instrument was created following an application by Bluescope Steel Ltd for a TCO on certain Walking Beam Furnace Parts. The Chief Executive Officer of Customs, upon satisfying the core criteria that no substitutable goods were produced in Australia, issued this TCO, which grants a zero percent duty rate on the specified parts, as opposed to the general rate of five percent. This initiative is intended to benefit importers by potentially allowing them to claim refunds on duties paid on these goods since the effective date of the TCO. The instrument was registered on 13 February 2006, but it is considered to have come into force on 25 November 2005, the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0516645 under the Customs Act 1901 applies to the specific case of Bluescope Steel Ltd's application for tariff concessions concerning certain Walking Beam Furnace Parts. The Act, operating within the Commonwealth jurisdiction, facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), provided the application meets the criteria set out in the Act, specifically that no substitutable goods were produced in Australia at the time of the application. The TCO reduces the duty rate from the general 5% to 0% for the specified goods, thereby benefiting importers who can apply for refunds of duty paid on imports since the TCO's effective date. The application of this TCO does not affect existing rights or impose any liabilities on individuals or entities other than the Commonwealth. This concession is effective as of the date the application was lodged, 25 November 2005, and is subject to the provisions and interpretations outlined in the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The Tariff Concession Instrument No. 0516645 (Instrument) under the Customs Act 1901 (Act) pertains to the application of lower rates of customs duty on certain goods, specifically certain Walking Beam Furnace Parts. Pursuant to section 269F of the Act, an applicant may request a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs (CEO). Section 269C outlines the core criteria that must be met for a TCO to be granted, which requires that on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business (section 269D and 269E). If these criteria are satisfied, the CEO is mandated to issue a written order under section 269P(3), specifying the goods to which the prescribed rate of duty applies. In this case, the general rate of duty on these goods is 5%, but the TCO reduces this to 0%.
The obligations imposed by the Act on the parties involved, particularly the CEO, include assessing whether the application for a TCO meets the core criteria as per section 269C. This involves determining whether substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. Furthermore, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In this instance, no submissions were received in response to the invitation. The TCO is considered to have come into effect on the date the application was lodged, which in this case was 25 November 2005.
Should there be a breach of the provisions set out in the Act or Instrument, the consequences can be severe. Although the explanatory statement does not detail specific penalties, breaches of customs legislation generally can lead to both civil and criminal penalties. Civil penalties can include fines, while criminal penalties can result in imprisonment. For example, under section 269S(1) of the Act, the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration. This ensures that the TCO does not unfairly impose liabilities on any individual or entity for actions taken prior to the TCO's effective date.